Aussie gold output up

DESPITE a number of mine closures in the June quarter, Australian gold production rose over the period, according to Surbiton Associates.
Aussie gold output up Aussie gold output up Aussie gold output up Aussie gold output up Aussie gold output up

June quarter production was 67 tonnes (2.3 million ounces), up 6% over the March quarter and 5% over the June 2012 quarter.

Surbiton director Dr Sandra Close said the higher gold output was due to increased tonnages plus slightly higher grades.

"The increase in grade was precisely what we expected would happen following the price fall in early April," she said.

"One of the easiest ways to cut cash costs per ounce is to increase the grade of ore going into the treatment plant.

"That's what has happened, along with a range of other cost-cutting measures, including increased throughput. However, some of the highest cost producers have fallen by the wayside."

Evolution Mining's Mt Rawdon mine in Queensland nearly doubled output in the June quarter, while St Barbara's Gwalia mine in Western Australia boosted production by about 60%.

Despite its recent woes, Newcrest Mining's Australian operations also performed well, with Telfer production up 30% in WA and the Cadia operations in New South Wales increasing production by 20% across its three mines.

Surbiton said the four operations that closed during the quarter were relatively small, with Focus Minerals' Laverton, KGL Resources' Murchison, Navigator Resources' Bronzewing and Tanami Gold's Coyote ceasing operations.

Focus is also closing Coolgardie, while the administrators of collapsed Apex Minerals have put Wiluna on care and maintenance.

But Close noted that there were mines opening or ramping up in the current quarter.

"The September quarter will see first production from Doray Minerals' Andy Well project near Meekatharra, WA, as well as the long-awaited commissioning of AngloGold/Independence's $A750 million Tropicana project in WA," she said.

"Also, Newcrest's Cadia East mine continues to ramp up production, so together these will more than replace output lost from recent closures."

Gold fell sharply in April and again in late June, but the Australian dollar also fell, softening the blow for local producers.

"The Australian dollar gold price averaged $1570 per ounce in the March quarter 2013, but fell to average $1425 per ounce for the June quarter," Close said.

"But now the price has recovered to around the $1570 per ounce mark again. If you factor in higher grades plus other cost-saving measures that the industry has recently implemented, profit margins should improve."

Australia remains the world's second-largest gold producer after China.

"Gold remains one of Australia's single largest exports," Close said.

"At today's spot price the 2012-13 year's gold production is worth around $13 billlion."

Full-year production from Australian mines was 259t or 8.3Moz, just below the 2012 financial year.

The largest contributor was Newmont Mining's Boddington operation, with full-year production of 730,000oz gold.

The next-largest contributor was the Newmont-Barrick Gold-owned Super Pit at 596,000oz, easily making 50% partner Newmont, Australia's largest producer.

Rounding out the top five producers were Newcrest's Telfer at 525,500oz, Gold Fields' St Ives with 418,000oz and Barrick's Cowal mine on 314,000oz.

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